By: Brown S.B. No. 1445
A BILL TO BE ENTITLED
AN ACT
1-1 relating to transfer of title to a motor vehicle, the collection
1-2 and administration of the motor vehicle sales tax, and certain
1-3 disclosures that must be made to the purchaser of a motor vehicle.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 152.001, Tax Code, is amended to read as
1-6 follows:
1-7 Sec. 152.001. Definitions. In this chapter:
1-8 (1) "Sale" includes:
1-9 (A) an installment and credit sale;
1-10 (B) an exchange of property for property or
1-11 money;
1-12 (C) an exchange in which property is transferred
1-13 but the seller retains title as security for payment of the
1-14 purchase price; and
1-15 (D) any other closed transaction that
1-16 constitutes a sale.
1-17 (2) "Retail sale" means a sale of a motor vehicle
1-18 except:
1-19 (A) a sale in which the purchaser is a dealer
1-20 who holds a general distinguishing number issued pursuant to the
1-21 terms of Article 6686, Revised Statutes, who acquires a vehicle for
1-22 the exclusive purpose of resale; or
1-23 (B) a sale of a vehicle that is operated under
2-1 and in accordance with Article 6686, Revised Civil Statutes of
2-2 Texas, 1925, as amended.
2-3 (3) "Motor Vehicle" includes:
2-4 (A) a self-propelled vehicle designed to
2-5 transport persons or property on a public highway;
2-6 (B) a trailer and semitrailer, including a van,
2-7 flatbed, tank, dumpster, dolly, jeep, stinger, auxiliary axle, or
2-8 converter gear; and
2-9 (C) a house trailer as defined by the
2-10 Certificate of Title Act (Article 6687-1, Vernon's Texas Civil
2-11 Statutes).
2-12 (4) "Motor Vehicle" does not include:
2-13 (A) a device moved only by human power;
2-14 (B) a device used exclusively on stationary
2-15 rails or tracks;
2-16 (C) road-building machinery; or
2-17 (D) a mobile office.
2-18 (5) "Rental" means:
2-19 (A) an agreement by the owner of a motor vehicle
2-20 to give for not longer than 180 days the exclusive use of that
2-21 vehicle to another for consideration;
2-22 (B) an agreement by the original manufacturer of
2-23 a motor vehicle to give exclusive use of the motor vehicle to
2-24 another for consideration; or
2-25 (C) an agreement to give exclusive use of a
3-1 motor vehicle to another for re-rental purposes.
3-2 (6) "Lease" means an agreement, other than a rental,
3-3 by an owner of a motor vehicle to give for longer than 180 days
3-4 exclusive use of the vehicle to another for consideration.
3-5 (7) "Public agency" means:
3-6 (A) a department, commission, board, office,
3-7 institution, or other agency of this state or of a county, city,
3-8 town, school district, hospital district, water district, or other
3-9 special district or authority or political subdivision created by
3-10 or under the constitution or the statutes of this state; or
3-11 (B) an unincorporated agency or instrumentality
3-12 of the United States.
3-13 (8) "Gross rental receipts" means value received or
3-14 promised as consideration to the owner of a motor vehicle for
3-15 rental of the vehicle, but does not include:
3-16 (A) separately stated charges for insurance;
3-17 (B) charges for damages to the motor vehicle
3-18 occurring during the rental agreement period;
3-19 (C) separately stated charges for motor fuel
3-20 sold by the owner of the motor vehicle; or
3-21 (D) discounts.
3-22 (9) "Owner of a motor vehicle" means:
3-23 (A) a person named in the certificate of title
3-24 as the owner of the vehicle; or
3-25 (B) a person who has the exclusive use of a
4-1 motor vehicle by reason of a rental and holds the vehicle for
4-2 re-rental.
4-3 (10) "Orthopedically handicapped person" means a
4-4 person who because of a physical impairment is unable to operate or
4-5 reasonably be transported in a motor vehicle that has not been
4-6 specially modified.
4-7 (11) "Volunteer fire department" means a company,
4-8 department, or association whose members receive no or nominal
4-9 compensation and which is organized for the purpose of answering
4-10 fire alarms and extinguishing fires or answering fire alarms,
4-11 extinguishing fires, and providing emergency medical services.
4-12 (12) "Motor vehicle used for religious purposes" means
4-13 a motor vehicle that is:
4-14 (A) designed to carry more than six passengers;
4-15 (B) sold to, rented to, or used by a church or
4-16 religious society;
4-17 (C) used primarily for the purpose of providing
4-18 transportation to and from a church or religious service or
4-19 meeting; and
4-20 (D) not registered as a passenger vehicle and
4-21 not used primarily for the personal or official needs or duties of
4-22 a minister.
4-23 (13) "Farm machine" means a self-propelled motor
4-24 vehicle specially adapted for use in the production of crops or
4-25 rearing of livestock, including poultry, and use in feedlots and
5-1 includes a self-propelled motor vehicle specially adapted for
5-2 applying plant food materials, agricultural chemicals, or feed for
5-3 livestock. "Farm machine" does not include any self-propelled
5-4 motor vehicle specifically designed or specially adapted for the
5-5 sole purpose of transporting agricultural products, plant food
5-6 materials, agricultural chemicals, or feed for livestock.
5-7 (14)
5-8 (15) "Nonprofit" means:
5-9 (A) organized as a nonprofit corporation under
5-10 the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
5-11 Vernon's Texas Civil Statutes); or
5-12 (B) organized and operated in a way that does
5-13 not result in accrual of distributable profits, realization of
5-14 private gain resulting from payment of compensation other than
5-15 reasonable compensation for services rendered by persons who are
5-16 not members of the organization, or realization of any other form
5-17 of private gain.
5-18 (16) "Seller-financed sale" means a retail sale of a
5-19 motor vehicle by a dealer licensed under Article 6686, Revised
5-20 Statutes, in which the seller collects all or part of the total
5-21 consideration in periodic payments and retains a lien on the motor
5-22 vehicle until all payments have been received. The term does not
5-23 include a:
5-24 (A) retail sale of a motor vehicle in which a
5-25 person other than the seller provides the consideration for the
6-1 sale and retains a lien on the motor vehicle as collateral;
6-2 (B) lease; or
6-3 (C) rental.
6-4 (17) <(16)> "Mobile office" means a trailer designed
6-5 to be used as an office, sales outlet, or other workplace.
6-6 SECTION 2. Subsection (a), Section 152.021, Tax Code, is
6-7 amended to read as follows:
6-8 (a) A tax is imposed on every retail sale of every motor
6-9 vehicle sold in this state. Except as provided by this chapter
6-10 <Section 152.047>, the tax is an obligation of and shall be paid by
6-11 the purchaser of the motor vehicle.
6-12 SECTION 3. Chapter 152, Tax Code, is amended by adding
6-13 Section 152.0411 to read as follows:
6-14 Sec. 152.0411. COLLECTION BY SELLERS. (a) A seller other
6-15 than an auctioneer who makes a sale subject to the sales tax
6-16 imposed by Section 152.021 of this chapter shall add the amount of
6-17 the tax to the sales price, and when the amount of the tax is
6-18 added:
6-19 (1) it is a debt of the purchaser to the seller until
6-20 paid; and
6-21 (2) if unpaid, it is recoverable at law in the same
6-22 manner as the original sales price.
6-23 (b) The seller shall remit to the tax assessor-collector in
6-24 the time and manner provided by law, taxes collected by the seller
6-25 as provided by this section.
7-1 (c) This section applies only to the sale of a vehicle that
7-2 is to be registered in Texas. If a purchaser intends to register a
7-3 vehicle outside Texas, the purchaser shall indicate that intent by
7-4 affidavit signed by the purchaser under oath.
7-5 (d) This section does not apply to a seller-financed sale.
7-6 (e) In this section, "auctioneer" means a person who holds
7-7 an auctioneer's license issued by the Texas Department of Licensing
7-8 and Regulation.
7-9 SECTION 4. Section 152.044, Tax Code, is amended to read as
7-10 follows:
7-11 Sec. 152.044. Payment by Seller. (a) If the comptroller on
7-12 an audit of the records of a seller finds that the amount of tax
7-13 due was incorrectly reported on a joint statement and that the
7-14 amount of tax paid was less than the amount due <or that the seller
7-15 failed to execute and deliver to the purchaser a joint statement
7-16 and any other documents necessary to register the vehicle>, the
7-17 seller and purchaser are jointly and severally liable for the
7-18 amount of the tax determined to be due.
7-19 (b) If the comptroller on audit of the records of a seller
7-20 finds that the seller failed to execute and deliver to the tax
7-21 assessor-collector in the time and manner provided by law the
7-22 documents necessary to register the vehicle in the name of the
7-23 purchaser, including the joint statement, together with the tax
7-24 due, if any, the seller is liable for the amount of the tax, plus
7-25 penalty and interest, if any, determined to be due.
8-1 SECTION 5. Section 152.063, Tax Code, is amended by adding a
8-2 new Subsection (g) to read as follows and by renumbering current
8-3 Subsection (g) as Subsection (h):
8-4 (g) A seller shall maintain at the seller's principal place
8-5 of business for at least four years from the date of sale, the
8-6 purchaser's affidavit required by Section 152.0411(c) of this code.
8-7 SECTION 6. Section 27, Certificate of Title Act (Article
8-8 6687-1, Vernon's Texas Civil Statutes), is amended to read as
8-9 follows:
8-10 Sec. 27. (a) Before selling or disposing of any motor
8-11 vehicle required to be registered or licensed in this State on any
8-12 highway or public place within this State, except with dealer's
8-13 metal or cardboard license number thereto attached as now provided
8-14 by law, the owner shall make application to the designated agent in
8-15 the county of his domicile or the county in which the vehicle is
8-16 purchased or encumbered upon form to be prescribed by the
8-17 Department for a certificate of title for such motor vehicle.
8-18 (b) The seller of a motor vehicle shall apply for the
8-19 registration, and Texas certificate of title in the name of the
8-20 purchaser of the motor vehicle that is the subject of the sale.
8-21 The seller shall file with the appropriate designated agent all
8-22 documents necessary to transfer title to the vehicle and register
8-23 the vehicle in the name of the purchaser and shall, at the same
8-24 time, remit motor vehicle sales tax if any. The duty placed on the
8-25 seller by this section is solely that of the seller and applies
9-1 both to a first sale and a subsequent sale.
9-2 (c) The seller shall complete the transfer of title and
9-3 registration requirements placed on the seller by Subsection (b) of
9-4 this section in the time and manner provided by law.
9-5 SECTION 7. Subsection (h-1), Article 7.01, Revised Statutes
9-6 (Article 5069-7.01, Vernon's Texas Civil Statutes), is amended to
9-7 read as follows:
9-8 (h-1) In addition to the provisions of Section (h) of this
9-9 article, "principal balance" includes a motor vehicle inspection
9-10 fee and a documentary fee for services actually rendered to, for or
9-11 on behalf of the retail buyer in preparing, handling, and
9-12 processing documents relating to the motor vehicle and the closing
9-13 of the transaction evidenced by the retail installment contract.
9-14 If a documentary fee is charged:
9-15 (i) it must be charged to both cash and credit buyers;
9-16 (ii) it may not exceed $50;
9-17 (iii) it shall be disclosed on the retail installment
9-18 contract as a separate itemized charge; and
9-19 (iv) the buyer's order and the retail installment
9-20 contract shall include in reasonable proximity to the point in the
9-21 buyer's order and retail installment contract where the documentary
9-22 fee is disclosed the amount of the documentary fee to be charged
9-23 and the following notice in type that is boldfaced, capitalized,
9-24 underlined, or otherwise set out from surrounding written material
9-25 so as to be conspicuous:
10-1 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
10-2 DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO
10-3 BUYERS FOR HANDLING DOCUMENTS AND PERFORMING SERVICES RELATING TO
10-4 THE CLOSING OF A SALE. <BUYERS MAY AVOID PAYMENT OF THE FEE TO THE
10-5 SELLER BY HANDLING THE DOCUMENTS AND PERFORMING THE SERVICES
10-6 RELATING TO THE CLOSING OF THE SALE.> A DOCUMENTARY FEE MAY NOT
10-7 EXCEED $50. THIS NOTICE IS REQUIRED BY LAW."
10-8 (v) If the language primarily used in the oral sales
10-9 presentation is not the same as that in which the retail
10-10 installment contract is written, the seller shall furnish to the
10-11 buyer a written statement containing the notice set out in
10-12 Subsection (iv) in the language primarily used in the oral sales
10-13 presentation.
10-14 SECTION 8. EFFECTIVE DATE: This Act takes effect January 1,
10-15 1996.
10-16 SECTION 9. The importance of this legislation and the
10-17 crowded condition of the calendars in both houses create an
10-18 emergency and an imperative public necessity that the
10-19 constitutional rule requiring bills to be read on three several
10-20 days in each house be suspended, and this rule is hereby suspended,
10-21 and that this Act take effect and be in force according to its
10-22 terms, and it is so enacted.